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Managing Danger and Risk in the VUCA* Century *Volatile, Uncertain, Complex & Ambiguous
How Full Spectrum Decision Making Can Help Your Organisation Reach Zero Harm
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“I cannot imagine any condition which could cause a ship to founder. I cannot conceive of any vital disaster happening to this vessel.
Modern shipbuilding has gone beyond that.”
Danger and Risk in the VUCA Century
This Century’s Biggest Workplace Challenge: Reaching Zero Harm
3 Steps to Achieve Workplace Zero Harm in the VUCA Century
Understand the Difference Between Danger and Risk
Understand What Has Got Us This Far
Understand the Individual and Team
The Bradley Curve
Full Spectrum Decision Making
Full Spectrum Decision Making
About the Author14
Contents
Edward John Smith, Captain of RMS Titanic
Why is the VUCA Century Making Everything More Risky?
What is VUCA?The 4 Stages of Zero Harm
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Does the world seem a bit more dangerous now than it did a decade or two ago? Do you think this feeling is justified? It might surprise you to learn that the world is just as safe, and just as dangerous, as it always has been.
Sure, you may think that in the 21st century there has been a dramatic spike in the number of natural disasters: the 2004 Boxing Day tsunami in the Indian Ocean that killed more than a quarter of a million people, Hurricane Katrina in 2005 (the third strongest hurricane ever recorded) that left a death toll of over 1,800, and the current Ebola virus epidemic in West Africa, which so far has led to more than 8,800 deaths.
And who could forget these devastating workplace events: Deepwater Horizon in 2010 that claimed 11 lives and had a disastrous environmental impact on the Gulf of New Mexico, the 2014 Soma coal mine explosion in Turkey that killed 301 workers, and the collapse of the 2013 Rana Plaza garment factory in Bangladesh that killed an estimated 1,129 employees.
This certainly sounds pretty dangerous – a lot more dangerous than a decade ago – but let’s take another look.
In the 20th century alone, Spanish Influenza claimed an estimated 100 million lives (approximately 5% of the world’s population), a massive meteorite with a force 1,000 times greater than the atomic bomb dropped in Hiroshima exploded above a fortuitously remote forest in Siberia, and then, of course, there’s World War I, the deadliest conflict in human history, which claimed more than 37 million lives.
Add to that, numerous workplace tragedies: the 1989 Piper Alpha explosion on a North Sea oil production platform that killed 167 workers, the 1921 Oppau explosion in Germany that killed more than 500 employees, and the 1984 Bhopal pesticide plant explosion in India (considered the world’s worst industrial disaster) that exposed over 500,000 people to methyl isocyanate, hence, the exact number of deaths is unclear but stretches up to 20,000 people.
The truth is that the world is no more dangerous now than it was back then. There is no doubt, however, that over the years the workplace has become safer through considerable effort and expense spent on plant safety, procedural safety, and organisational and behavioural safety.
Yet, in what has become something of a worldwide phenomenon, safety performance levels have recently plateaued. Organisations are now faced with an even more difficult fight as they strive to break through the safety performance plateau and reach the Holy Grail – zero injuries, zero harm.
VUCA originated in the United States Military Academy at West Point. It was devised as a succinct way of describing the ‘new’ landscape that the US military
found itself in after the cessation of the Cold War. The global landscape had seemingly changed overnight from bilateral (i.e. the West vs the Soviet Union) to
multilateral (i.e. the West vs many smaller, unknown opponents). This altered landscape would, they
predicted, bring with it a lack of stability, certainty and simplicity, and an increase in ambiguity. And for the
most part, they were spot on. But these days it’s not just the military that have to understand the concept of VUCA. It is now everyone’s imperative to understand
VUCA, because it affects everyone.
WHAT IS VUCA?
DANGER AND RISK IN THE VUCA CENTURY
This Century’s Biggest Workplace Challenge: Reaching Zero Harm
VUCA Leads to Low Employee Engagement, Which Leads to Increased Safety Incidents
If you’ve read Welcome To The VUCA Century, my white paper on the organisational challenges created by the VUCA Century, you’ll know that VUCA is one of the leading causes of employee disengagement, with 87% of employees worldwide not engaged in their work. Alarmingly, Gallup’s research on this phenomenon suggests that organisations with low employee engagement have 52% more safety incidents1. Disengaged workers simply don’t care enough about their jobs, team mates and organisations to do their work safely.1
VUCA Leads to Fluctuating Commodity Prices, Which Leads to Internal Cost-cutting.
At the time of publishing this paper, the previous 12 months have seen both WTI crude oil and iron ore prices fall by approximately 50% and company profits have been smashed. Commodity prices are all over the place. This huge volatility in prices and profit margins has created considerable uncertainty and reduced business confidence, which in turn has lead to reduced internal expenditure on staff development. But staff development is crucial to break through the safety performance plateau.
Achieving Zero Harm Requires Hard Work
The development of plant safety, procedural safety and behavioural safety has made workplaces much safer than they used to be, but these were easily won gains because there was so much room for improvement. As with any efficiency drive (or mountaineering expedition for that matter), the final summit push will require the most effort. Why? Because every single individual in a team needs to understand the following concepts if zero harm is to be reached.
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1 http://www.gallup.com/services/169328/q12-employee-engagement.aspx
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3 Steps to Achieve Workplace Zero Harm in The VUCA Century
Let’s explore in more detail, how your organisation can break through the safety performance plateau and be well on the way to achieving zero harm in the workplace.
UNDERSTAND THE DIFFERENCE BETWEEN DANGER AND RISK
UNDERSTAND WHAT HAS GOT US THIS FAR
UNDERSTAND THE INDIVIDUAL AND TEAM
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1. Understand the Difference Between Danger and Risk
As we’ve already established, it’s not correct to say that the world is more dangerous now than it was before, but it is true to say that it has become “riskier”.
To understand what we mean by “risk”, let’s first look at how risk differs from danger.
If something is dangerous, such as a leaking gas pipe or a confined space, there is no way around the fact that it is dangerous. Sooner or later, when a human interacts with it, their health will be negatively impacted upon. So in other words, danger is fixed, and it has consequence. Something is either dangerous or it is not, and if it is dangerous then there will be a consequence.
We can therefore define danger as cer tainty with consequence.
Risk on the other hand is not fixed, and it is not certain.
Risk is based on human perception, and therefore it cannot be fixed. The situational risk of an event can change based on the nature and experience of the person perceiving that risk. For example, you might think that an expedition to climb Mount Everest via the North Ridge is patently absurd, whereas I think that with a measured approach, a small but strengths-based team composition, high fitness levels and an agile strategy, it’s a relatively low-risk proposition. On the other hand, you might feel entirely comfortable leading a team of underground drillers 2,500 metres below the earth’s surface, but that’s something way outside my personal level of risk.
So, your individual perception of risk will differ depending on your own personal experience and attitudes.
The reasons for these differences relate to what psychologist David Hillson and Ruth Murray-Webster2 refer to as our attitude to risk. My attitudes to climbing Mount Everest and underground drilling will be significantly different to yours because what seems certain and clear to me seems uncertain and ambiguous to you, and vice versa.
We can therefore define risk as uncertainty and ambiguity with consequence.
WHY IS THE VUCA CENTURY MAKING EVERYTHING MORE RISKY?
If you’ve read my white paper Welcome To The VUCA Century then you’ll know that we’re moving from
a world of stability, certainty, simplicity and clarity (SCSC) to one of volatility, uncertainty, complexity and ambiguity (VUCA). The SCSC to VUCA transition is underway right
now. That means, that the world is experiencing increased uncertainty and ambiguity, and so it follows that the world has become a riskier place, and that in turn makes us feel less comfortable. But it’s OK to feel uncomfortable about this increase of risk in the world.
After all, we must get comfortable with getting uncomfortable to solve this comfort paradox.
(See Welcome To The VUCA Century for more clarity on this.)
2 http://www.gowerpublishing.com/isbn/9780566087981)
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2. Understand What Has Got Us This Far
To understand how your organisation can break through the safety performance plateau, we need to look at the historical development of workplace safety management. As you can see from the diagram on the next page, the three stages in the evolution of workplace safety management have resulted in phased, sequential improvements to reductions in workplace accidents. You will also note the current plateau that we have now reached, and the fourth stage, which is the solution.
You’ll also see the overlay of the four levels of competency, as described by Dupont’s widely used Bradley Curve3. In case you’re not familiar with the Bradley Curve, it’s a tool for measuring the maturity of an organisation’s safety culture.
Reactive Stage People do not take responsibility. They believe that safety is more a matter of luck than management, and that “accidents will happen.” Over time, accidents do actually happen. In short, Reactive is bad. Dependent Stage People see safety as a matter of following rules that someone else makes. Accident rates decrease and management believes that safety could be managed “if only people would follow the rules.” In short, Dependent is also bad. Independent Stage Individuals take responsibility for themselves. People believe that safety is personal, and that they can make a difference with their own actions. This reduces further accidents. In short, Independent is good. Interdependent Stage Teams of employees feel ownership for safety and take responsibility for themselves and others. People do not accept low standards and risk taking. They actively converse with others to understand their point of view. They believe true improvement can only be achieved as a group, and that “zero injuries” is an attainable goal. In short, Interdependent is also good.
3 http://www.dupont.com/products-and-services/consulting-services-process-technologies/brands/sustainable-solutions/sub-brands/operational-risk-management/uses-and-applications/bradley-curve.html
THE BRADLEY CURVEThe Bradley Curve makes it simple for everyone to
understand the shifts in mindset and actions that need to occur over time to develop a mature safety culture.
Plant The first stage, comprising improvements in the safety
of plant equipment. This is the industrial revolution, which brought increased efficiencies, but also high accident rates through the use of automated machinery. This corresponds with the Reactive stage, where employees take no responsibility and merely rely on their equipment as a means to stay safe. This is obviously not desirable.
Process The second stage, involving the introduction of risk
management and procedural safety in the post-World War II era. Risk management is the process that identifies, assesses and prioritises the risk, and then describes the safest and most efficient way to perform a certain task in the context of this risk. This corresponds with the Dependent stage and is where employees become dependent upon the risk management process, in the belief that as long as they stick to the process they will be OK. This is better than being reactive, but it’s still not enough.
Organisation The third stage, which has been the move early this
century towards behavioural safety. It focuses on developing a safety culture across the entire organisation, including daily safety behaviour of all employees, and is led by the executive team to flow down to all employees. The Organisation approach is “top-down” as opposed to Plant and Process, which are both “bottom-up”. This is essentially the creation of a safety culture within the organisation. This also corresponds with the Dependent stage. Most safety managers currently implementing behavioural safety programs will disagree with this and say that the whole point of behavioural safety is about empowering individuals to become independent and interdependent. But behavioural safety is about creating an overarching context to support safe behaviours – it doesn’t actually provide individuals with the tools to make safe decisions for themselves and for their teams. It’s like taking a team of climbers into the Himalayas, telling them to be safe and then not giving them the ropes, ice axes and crampons to actually climb the mountain safely!
The Individual and Team The fourth stage, which is the most important, and most
recent stage, to understand and apply this century, during VUCA times. We’ll now take a look at this in much more detail.
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PLANT(reactive)
PROCESS(dependent)
ORGANISATION(dependent)
PLATEAU
INDIVIDUAL AND TEAM(independent
interdependent)
ZERO HARM
THE 4 STAGES OF ZERO HARM
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3. Understand the Individual and Team
To develop employees who are truly Independent and Interdependent, organisations need an understanding of how an individual works, how that individual works in a team, and how, collectively, those individuals working in a team think and feel about risk. Why? Because this is the operational level at which all work is done and at which all decisions are made. Working safely means making safe decisions.
When determining an appropriate course of action in an uncertain and ambiguous working environment with consequences, everything else stems from the decisions that the individual and team make. In order to understand how the individual and team become Independent and Interdependent, we need to be aware of what’s actually happening behind the scenes every time a decision is made. To understand this, we need to look at how the human brain operates and thinks. More specifically, we need to understand the complex thought processes that enable the individual and team to manage risk and make safe decisions. Those decisions we refer to as “Full Spectrum”.
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Fast Thinking and Slow Thinking
The basic tenement of Kahneman’s work is that the human brain has two ways of thinking: fast and slow. Fast thinking is quick, intuitive and often emotional, while slow thinking is steady, deliberate and rational. All of our thinking falls into one of these two categories. Fast thinking is energy efficient, but sometimes unreliable and prone to making subconscious mistakes, while slow thinking uses a lot of energy and is at times lazy, but is very good at solving complex problems.
The past decade has seen significant advances in the understanding of neuroscience and the complex thought processes behind decision making. The most well known of these is the work of Daniel Kahneman, the author of the ground-breaking book Thinking Fast, Thinking Slow4 (for which he won the 2002 Nobel Prize). Although initially applied to economic theory, there is much scope for further application to workplace risk management and safety, involving two systems of thinking.
FAST THINKING EXAMPLES: Complete the phrase “salt and…”
Whistle a tune while you are driving
Answer:1 + 1 = ?
SLOW THINKING EXAMPLES: Solve a complex riddle
Give someone else directions while you are driving
Read and understand the ideas within this white paper
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FULL SPECTRUM DECISION MAKING
4 http://www.amazon.com/Thinking-Fast-Slow-Daniel-Kahneman/dp/0374533555
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Rational, Emotional and Subconscious Thinking
Operating across this spectrum of fast and slow thinking are three additional styles of thinking that we must also understand: rational, emotional and subconscious.
Ever been faced with a stressful situation and heard yourself, or someone else, say, “OK, just calm down and think about this rationally”? If you believe what you hear in the workplace then you’d be forgiven for believing that rational thinking is the only type of thinking that is important. Rational thinking is deliberate and steady – classic slow thinking. Yet, to ignore the emotional and subconscious components of thinking when making decisions (both classic fast thinking) would be foolhardy.
Emotional thinking at its most basic level seeks either pleasure or pain and is generally not easily regulated. Subconscious thinking is even less regulated (it is subconscious, after all), but can be incredibly influential and distortive of the facts in the decision-making process. In order to make full spectrum safe decisions, whether as individuals or in teams, we need to become better at identifying what influence these two types of thinking are having on us.
FULL SPECTRUM DECISION MAKING
EMOTIONAL SUB- CONSCIOUS
RATIONAL
slow thinking
fast thinking
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Being Aware of our Emotional Intelligence
Emotional thinking can sabotage both the individual and team decision-making process because emotions can override logic. This can have disastrous consequences. For example, every year novice climbers are dying in the Himalayas trying to reach the summit of Mount Everest, desperate for the fame and glory, knowing full well they are completely lacking in experience. Or those that have cut corners and rushed a job so they can finish work and knock off at 5pm.
Being self aware of your own emotional thinking is referred to as emotional intelligence, and is based on the work of Peter Salovey, John Mayer and Daniel Goleman.
There are four stages to developing emotional intelligence:
RECOGNISING THE EMOTION “What is the emotion that I’m feeling? Is it anger? Is it frustration?”
UNDERSTANDING THE EMOTION “I know why I’m angry. John didn’t do what he said he’d do.”
HANDLING THE EMOTION “Well, John has just got back from a day of sick leave so I shouldn’t be too hard on him”
EXPRESSING THE EMOTION “John, I’m frustrated that you didn’t get that job finished, but I do understand it couldn’t be helped given your recent illness.”
If employees understand the basic concept of emotional intelligence they can learn to shift the emotional component of decision making from thinking fast to thinking slow. This is one of the keys to enabling individuals and teams to make full spectrum decisions.
Being Aware of our Subconscious Thinking
If emotional thinking can override logic and lead to unsafe decisions, then subconscious thinking can secretly influence logic and lead to disastrous, catastrophic and deadly decisions!
The brain has evolved over time to expend as little energy as possible when making decisions, and this means the brain has developed a number of shortcuts. But, as anyone who’s ever used an in-car GPS system can attest, shortcuts often don’t work out as planned! These shortcuts, referred to by psychologists as heuristic or subconscious biases, are generally behind the majority of poor decisions made by humans, particularly in the workplace.
In mountaineering, the most classic bias is known as Summit Fever. This is where a climber, after many weeks of hard work, gets close to the summit of a mountain and decides to press on despite the fact that the final ridge may be heavily corniced or the hour of day is too late. The climber ignores the slow thinking, which suggests it is too dangerous to continue, and instead gives in to a subconscious bias that tells them it’s probably not as dangerous as it looks, and that the end and the glory is in sight.
There are a multitude of biases that affect the decision-making process of individuals and teams, but here are four to get you started:
THE AVAILABILITY BIAS “That plane crash is the third crash in that area this year! I’m not going to fly there now.”
THE CONFIRMATION TRAP – “I’m sure I don’t need to use my safety gloves for this task. Amber didn’t when she tried it and she didn’t get hurt.”
THE RISKY SHIFT – “Well, if the rest of the group thinks it safe to try it, I guess it must be safe.”
THE HERO EFFECT – “John sure seems to know what he’s talking about. I’d better not disagree with him.”
Again, having workers understand the basic concept of heuristics, and teaching them to identify the multitude of different subconscious biases that they are prone to, will enable them to shift the subconscious component of decision making from fast thinking to slow thinking. This is the key to enabling individuals and teams to make full spectrum decisions.
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Implementing full spectrum decision making across your organisation not only helps break through the safety performance plateau, but also makes seriously good
business sense.
As organisations contend with the challenges of the VUCA Century – low employee engagement, fluctuating
commodity prices and profit margins, and ongoing cost-cutting initiatives – the goal of zero harm becomes even
more difficult to achieve. The solution lies in an organisation-wide dedication to teaching the basics of full spectrum decision making to all employees and it is only
this that will enable a breakthrough of the safety performance plateau.
FULL SPECTRUM DECISION MAKING
Patrick Hollingworth is an everyday family man from the west coast of Australia. He’s also a high-altitude mountaineer, and an expert in leadership, teamwork and safety. He worked towards his own personal goal of an unguided ascent of Mount Everest for ten years, and in 2010, after a lot of hard work and perseverance, he achieved it. Standing on the summit of the world’s highest mountain reinforced his belief that the benefits of taking oneself out of their comfort zone far outweigh the initial discomfort experienced. He’s been involved in more than a dozen international expeditions, including seven to the Himalayas
Today, Patrick’s works with clients across the globe to help their leaders and teams get comfortable getting uncomfor table in an organisational landscape, which is becoming more volatile, uncertain, complex and ambiguous by the day. He delivers keynote presentations, workshops and programs, and has been awarded the coveted Certified Speaking Professional (CSP) designation – it is the speaking profession’s international measure; at last count in 2014 it had been awarded to fewer than 500 people, worldwide.
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About the Author
LEARN FULL SPECTRUM DECISION MAKING TODAY
Contact me for details about teaching Full Spectrum Decision Making in your organisation. I offer half-day and full-day engaging and experiential workshops that will set you well on your way to achieving zero harm in your workplace.
Download my white paper Welcome to the VUCA Century to learn the 9 steps that will help guide you and your organisation through the VUCA Century.
To discover more, check out www.patrickhollingworth.com or contact Patrick on +61 401 004 402 or [email protected]
SPEAKING WORKSHOPS PROGRAMS
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COPYRIGHT Copy this the right way.
So please be sure to take specialist advice before taking on any of the ideas. This book is general in nature and not meant to replace any specific advice. Patrick Hollingworth, employees of said company and brand derivations disclaim all and any liability to any persons whatsoever in respect of anything done by any person in reliance, whether in whole or in part, on the paper.
DISCLAIMER We care. But you’re responsible.
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